Timing off as Wolseley takes a tax break in Switzerland

Has Ian Meakins spent the past week knees knocking, eyes scrunched, peeping between his fingers, in dread of the public fury against his decision to take Wolseley to Switzerland to save tax?

Or, frankly, could the world's biggest plumbing merchant not really give a monkey wrench what we think? We probably know the answer to that.

To recap, Wolseley is uprooting its corporate structure, moving its tax base to Zug and erecting a shiny new brass plate in Jersey so it can avoid paying UK tax on the profits it makes in its overseas operations.

How much it pays to the canton of Zug is a secret - Swiss rates are negotiated in private between officials and companies - but it's £20 million or so less than it'd pay here.

Wolseley is, of course, not the first of our major companies to huff off about the overseas profits tax - WPP, Shire Pharmaceuticals and UBM have done the same.

The difference is in the timing.

Sir Martin Sorrell and Co shifted out of desperation at a decade-old Labour administration selectively deaf to the lobbying of private-sector giants. Meakins, on the other hand, made his decision while pro-business Dave and George were still trying to find all the Downing Street light switches.

What a way to treat a new Government that came in with a pledge - being repeated at this week's Tory party conference - to cut taxes for business. So far, the coalition has been true to its word. Within weeks in office, it launched National Insurance holidays, set up a tax simplification office and, most importantly, declared it would slash corporation tax from 28% to 24% - the lowest rate for any European economy - by 2014.

The CBI, the Institute of Directors and the other powerful lobbying clubs are delighted. That's our boy Cameron, doing what we voted him in for.

Whether you agree with slavishly pro-business governments or not, you can't argue the that PM is not standing by his pledges. This is where Wolseley's move really sticks in the craw. OK, so it was about overseas profits tax, not UK corporation tax or NI, that Meakins got his pipes in a twist.

But Cameron has also pledged to reform in full the rules on overseas profits by spring 2012. A major consultation process has already started and interim improvements will be made in spring 2011. That's only five or six months away. Fast work.

But it's still not good enough for Wolseley. "There is a lack of visibility," Meakins complains. Well, of course there's a lack of visibility, Ian. The new Government has only just got into power, and has a lot on its plate: this Comprehensive Spending Review is pretty important, what with the £155 billion of debts we've saddled ourselves with. Big issues, but CFC is still high up there on the agenda.

Old-fashioned my view may be, but Meakins should have given the Government a fair fighting chance before taking his ballcock away.

Haven sent

That may or may not be true — the Government's review will tell us soon enough. But the Treasury informs me that most European countries have an equivalent. Whitehall sources say our version is almost identical to that levied in France.

I've not heard that Renault, Peugeot or Carrefour are shaking their fists at President Sarkozy with threats to quit, but big business over here often seems less patriotic than the French.

Clearly, Ireland takes a very benign view of the matter, as Dublin has become the haven of choice for most of those fleeing our shores.

Hmm... Ireland. Now there's a country whose economic stewardship we should look to copy.

Let's cash in by giving barracks marching orders

I spend several minutes a day stuck in the Candy Brothers' One Hyde Park traffic (nowadays their billionaires' development snarls you up both on the Knightsbridge and park side; it can't be avoided).

There's a peculiar mishmash of architecture to ponder as you wait for the green light. A run of beautiful embassies with gardens backing into the park, the stylish Gothic of the Mandarin Oriental — where suites starts at £650 a night — then the Candys' razor sharp high-rise, where the penthouse has just gone for £140 million.

After that: nearly four acres of vast, ugly, Hyde Park barracks. The site consists of a squat, 1970s redbrick sprawl and a drab tower block once voted number eight in a poll of Britain's worst eyesores.

Given the artillery of handbags flying back and forth between George Osborne and Liam Fox over the strategic defence review, it seems to me the MoD could do worse than think of flogging some, if not all, of this lot off. Let a sovereign wealth fund buy it, team up with the Candys and create Two and perhaps even Three Hyde Park.

Doubtless, it would not go down well with the barracks' residents — particularly the pair in green I spied one evening last week expansively smoking their cigars on the balcony while enjoying the vista.

Sorry chaps, but surely there are cheaper parts of central London where the Household Cavalry could be conveniently housed, possibly without a park view.

Of course, the horses would need to be stabled elsewhere, too, but these are not insurmountable problems. The MoD is capable of creative planning, as the move of the King's Troop Royal Horse Artillery from St John's Wood to Woolwich shows.

A few dozen Chinooks might pacify the grumblers. And I've not read that the disappearance of Chelsea Barracks has dented our defence capability.

Ian Marris at agents Knight Frank is currently selling the St John's Wood barracks for residential redevelopment. He tells me the taxpayer would get "many hundreds of millions" — at £1500-£2000 a square foot — for the Hyde Park plot .

With a defence budget of £37 billion or so, I guess this is just a puff of smoke, but you do wonder if there aren't similar potential savings in that £20 billion of property we own through the MoD.

And if the developers did get hold of the Hyde Park Barracks, at least I'd know the inevitable years of traffic disruption were shaving a bit off my tax bill.

* Now here's a curious thing: Goldman Sachs, as we report in these pages today, has had a pretty bad first half of the year at its London division. No surprises there, as all the big investment banks have been having a muted time of late. But this is the same bank that has quietly removed its £1 million bonus cap by introducing "interim bonuses" paid in shares over the summer to key staff. These have been needed, we're told, to prevent staff defecting to rivals. Many analysts, most notably the marvellous Meredith Whitney, are bearish about investment banks, but Goldman's pay deals suggest the chiefs of these titans are not so worried. Perhaps 2011 won't be so bad for the rainmakers after all.